Four out of five commissioners reportedly believe Google broke antitrust laws.

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A Reuters report, citing three anonymous sources, says that the Federal Trade Commission is on the verge of launching an antitrust lawsuit against Google. "Four of the FTC commissioners have become convinced after more than a year of investigation that Google illegally used its dominance of the search market to hurt its rivals, while one commissioner is skeptical," Reuters reports.

Rumors of the FTC investigation surfaced last year. While the details of the investigation are secret, Reuters notes that several firms, including Yelp, have publicly complained about Google's business practices.

Last-minute negotiations between Google and the commission could avert a formal legal battle. But time is short. Jon Leibowitz, the chairman of the FTC, has stated that he expects to wrap up his investigation of the search giant before the end of the calendar year. Two of the sources who spoke to Reuters confirmed that the agency is still planning to make its decision before the new year.

The Reuters report was corroborated by The Hill. That publication reports that the FTC's investigation focuses on "whether Google manipulates its search results to ensure that its own services, such as YouTube, Google Maps, and Google Plus, appear above those of its rivals." It says an announcement on the subject is expected after the November elections.

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These issues came to light a year or so ago when the Senate held antitrust hearings into Google's anticompetitive practices. Here's a pre-hearing background piece from the NYT, complete with Netscape analogies. Then during the hearing Eric Schmidt flat out denied that Google rigs its search results. Yelp and TripAdvisor testified otherwise and that they were threatened by Google with search lockouts, that Google copied their user reviews to flesh out Google Places, and had their sites discriminated against in search results. Other companies like NexTag made similar claims.

One does not have to be a monopoly to trigger antitrust scrutiny, the actual criteria is to have "market power." Like a monopoly, it is not illegal to achieve market power, it's just illegal to abuse it in an anticompetitive manner. There's no question whatsoever that Google has market power in the online search/advertising market. The only question is whether they've abused it to muscle in on other markets.

Naw, they were first: I presume you applauded when Amazon complained to this same FTC about iBooks.

So if YOU were an FTC commissioner, what heinous crimes would you charge Apple with, to satisfy your lust for their blood?

Way to assume - as a matter of fact if you were to read back through my old posts about the Apple-Amazon e-books debacle here on Ars you'd see that I have always thought Amazon to be totally anti-competitive for their practices in regard to overly dominant market position. The difference between Google search and Amazon e-books is that they (Amazon) went out of their way to force publishers to lower their prices or face being locked out of what essentially was the only place to purchase ebooks (they had ~95% marketshare with the Kindle). However, Apple was clearly in the wrong by colluding with the publishers to try to artificially raise the prices of e-books by forming what amounted to a cartel with exclusive deals through Apple. Apple wasn't doing it because they felt it was the right thing to do - they were doing it because someone else (Amazon) had a monopoly in a market and they wanted to take that monopoly for themselves (or form a duopoly at best). In that case - Apple and Amazon are both in the wrong.

Apple is not anywhere close to having a monopoly in anything, which is a prerequisite of being the target of an antitrust investigation.

No but they have and exercise market power. As pointed out by Ruddy, that's the measure.

Tried competing with iTunes? Safari? Apple's maps app? Apple is doing what Microsoft did in the 90s, and is getting away with it.

The difference between Apple and Microsoft is that Microsoft had a > 95% marketshare of personal computers and Apple has a < 40% marketshare of smartphones.

Back in the 90s, you didn't really have much choice if you didn't like Microsoft's business practices. I've used Apple computers since the early 80s and I had to get a Windows PC back then because it became way too much of a hassle to interoperate with everyone else in the world otherwise.

Today, if you don't like iTunes, or Safari, just ditch your iPhone, and pick up a Galaxy S3 or whatever other Android handset you like. Not only have you just escaped Apple's velvet fist, you just left the minority smartphone option and joined the majority smartphone option.

One does not have to be a monopoly to trigger antitrust scrutiny, the actual criteria is to have "market power." Like a monopoly, it is not illegal to achieve market power, it's just illegal to abuse it in an anticompetitive manner. There's no question whatsoever that Google has market power in the online search/advertising market. The only question is whether they've abused it to muscle in on other markets.

The interesting part of the whole equation is what evidence they have of Google categorically manipulating search rankings for a small group of companies' websites.

I say it's interesting mostly because they would have to be pulling the whole scheme from e-mail and, well, phone intercepts, what with Google's code being proprietary and in constant flux.

I'm certainly curious about whether it's true, but honestly the ecosystem buy-in is complete. There's also a ton of really interesting (legally speaking) tactics Google could pursue in defending against an antitrust suit including dismissal on grounds of not qualifying for the class -- the FTC can't break up a company that doesn't qualify for the class even if it did when the investigation started. Microsoft may have inadvertently done Google an enormous favor by tightening up.

No but they [Apple] have and exercise market power. As pointed out by Ruddy, that's the measure.

Surely there's no question Apple has market power in some of the markets it competes in. However you need to be careful about what market you're talking about them abusing power in. For example Psystar tried to claim Apple was being anticompetitive by excluding them from a hypothetical Mac hardware clone market, but the relevant market for antitrust purposes there was the desktop PC market, and there was/is in fact no such thing as a Mac hardware clone market. Thus Psystar's claim was an epic legal failure.

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Tried competing with iTunes?

Are you claiming Apple prevents other music players from competing in the music player market?

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Safari?

Are you claiming Apple prevents other browsers from competing in the browser market?

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Apple's maps app?

Are you claiming Apple prevents other map apps from competing in the map apps market?

While its true Apple may restrict some of that software on its own hardware, as Apple v Psystar illustrated, the Mac or iOS device market is not a common (i..e., relevant) market for antitrust purposes.

The problem with this case is that the people making all the noise are Google's competitors. You don't see a lot of companies who bought ads complaining. Its the companies that sell ads. There is a working group which includes Microsoft and Apple who's mission it is to bring down Google. This is their doing from what I can see.

Robert Bork, an antitrust scholar, is basically calling this case a POS. Microsoft and their sour grapes.

These issues came to light a year or so ago when the Senate held antitrust hearings into Google's anticompetitive practices. Here's a pre-hearing background piece from the NYT, complete with Netscape analogies. Then during the hearing Eric Schmidt flat out denied that Google rigs its search results. Yelp and TripAdvisor testified otherwise and that they were threatened by Google with search lockouts, that Google copied their user reviews to flesh out Google Places, and had their sites discriminated against in search results. Other companies like NexTag made similar claims.

One does not have to be a monopoly to trigger antitrust scrutiny, the actual criteria is to have "market power." Like a monopoly, it is not illegal to achieve market power, it's just illegal to abuse it in an anticompetitive manner. There's no question whatsoever that Google has market power in the online search/advertising market. The only question is whether they've abused it to muscle in on other markets.

"Yelp and TripAdvisor testified otherwise and that they were threatened by Google with search lockouts, that Google copied their user reviews to flesh out Google Places,..."

Don't forget this isn't the first time google was caught deliberately copying competitors databases to add to its own competing product. Ars did a story on it in January:

I would love to be able to better configure the way google search works to match my workflow, which would also help Google eliviate the anti-trust issues -- they could have an option to turn on/off search integration of images/videos/maps/... and even allow integration with other sites (e.g. for map results if the other map site supports Lat/Long coordinates in URL parameters).

For example, I would like to configure:

1) Did you mean? (a.k.a. typo corrections) / Search for X instead.

This is useful for typos, but not for intentional things like searching for wierd name spellings (e.g. searching for "revekkah" shows results for "rebekkah"). I want the default to be: always search for what I typed, but give me the option for typo correction. I have seen google behave differently for me in this case -- maybe it is learning from my search history.

2) Stem / Synonym matching

If you search for e.g. "playing" you also get results for "play", "players", etc. (matching the stem of the word, not just the exact word). This leads to results I do not want, e.g. searching for "playing the game" also finds "playing the games" and "play the games" -- not what I am searching for.

I would like to turn off the "match word stems" feature.

I have also seen this include synonyms as matches, but cannot recall an example.

I have also seen it include results that partially match my search -- e.g. searching for "winrt" used to have results for "winter" as well.

3) Punctuation characters

If I search for "xml:space" without quotes, google treats the results as if I wrote "xml space" and so get results like "Represent space and tab in XML tag - Stack Overflow" -- not what I want. If I include quotes around it I get better results, but I also get results like "Exporting Confluence Pages and Spaces to XML - Confluence ..." which don't reference xml:space anywhere.

I truly would [will] be interested in seeing how the feds deal with G's typical response that "another SE is just a click away". (I truly would [will] be interested in seeing how the feds deal with Apple's claim that another hardware device is just a purchase away.)

For me, Google offers better results, better side services, and great integration among services. If offering quality is an anti-trust issue, I'm not sure what to say other than MS still has a 91.7% market share and Bing isn't getting anti-trust allegations.

Google: We'll offer free or very cheap services of the highest quality, track your usage patterns and show you ads that save you money.. OMG!!! EVIL!!

So because Google is a company that makes great products and gives them away for free, they shouldn't be held to task if they may be committing antitrust violations? If they made lousy products would you feel the the investigation of antitrust violations that might be true would be more appropriate?

Based on over a year of inquiries, the FTC may come to the conclusion that anti trust violations have occurred. If Google is innocent then nothing will happen to them. If they are guilty, they should be taken to task. It's really that simple in my opinion. The fact that they also make great software is completely irrelevant.

I don't mind Google getting in trouble for anti-trust violations, what I don't like is this same anti-trust crap comes up every few years based on false allegations.

Some corp gets mad that their crappy products don't get ranked high or they try gaming the system and Google down ranks them. In the end, these corps piss-and-moan to the FTC, send an old friend lobbyist over to the FTC to take them out for some parties, then the FTC decides Google needs to get another check-up, which costs Google money.

If you've been watching internet news for the past decade, you'll know this has happened many times already.

I like giving every start-up (like Google was a few years ago) a decent chance. But this will be just like the last big tech anti-trust against Microsoft, and also during a Democrat regime. And like Microsoft will result in nothing meaningful for the start-ups, but will cripple the innovation. The guy who ran that previous expensive debacle, Joel Klein got rewarded with a political job in New York City -- Microsoft is not creating at its previous rate, but still dominates -- great work!

But, in addition to trial lawyers who are licking their chops in anticipation, there is another bunch that is high-fiving -- the governments around the world. They will cite the American destructive attack on an American company with the dual benefit of helping their local companies become the next Google -- and collecting country GDP-sized fines. Oh please, give me more Democrats deciding what is best for me and my country - Oh OK, what is best for them and who cares about me or my country!

I like giving every start-up (like Google was a few years ago) a decent chance. But this will be just like the last big tech anti-trust against Microsoft, and also during a Democrat regime. And like Microsoft will result in nothing meaningful for the start-ups, but will cripple the innovation. The guy who ran that previous expensive debacle, Joel Klein got rewarded with a political job in New York City -- Microsoft is not creating at its previous rate, but still dominates -- great work!

But, in addition to trial lawyers who are licking their chops in anticipation, there is another bunch that is high-fiving -- the governments around the world. They will cite the American destructive attack on an American company with the dual benefit of helping their local companies become the next Google -- and collecting country GDP-sized fines. Oh please, give me more Democrats deciding what is best for me and my country - Oh OK, what is best for them and who cares about me or my country!

The FTC most likely brought this suit up completely separated from party or administration concerns, and supposedly is waiting until after the election to pursue any claims to avoid politicizing the topic.

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Microsoft is not creating at its previous rate, but still dominates -- great work!

But Microsoft didn't get to dominate in new industries like they otherwise would have. They maintained control over their key industry (OS, office productivity software), but haven't successfully been able to take over e.g. smartphones, which MS saw coming a long ways off.

It's going to be interesting to see what kind of changes they would want for google to not "hurt their rivals".…I get how they feel hurt by google…

There are all sorts of complaints to the FTC…

It's not clear to me why you're responding to my post. I singled out Nextag because a) they were mentioned in the linked article, b) they were featured in the Senate hearings last year, and c) they served as a specific example for a class of the companies that have lodged complaints, allowing me to use their complaints as context.

Your post reads like a non sequitur.

I was merely trying to separate discussions of “hurt feelings” or “complaints” or even “hurting rivals” from the basis for the FTC filing a suit. Ideally, the FTC doesn't respond to whining, no matter how vociferous, but rather to actions that are illegal under US law.

Sometimes I respond to a post to contradict it, but here I was just riffing on one of your themes.

Anti-trust means this: You are using a monopoly position in one market to artificially promote your products in other markets that wouldn't otherwise succeed against competitors.

This is why Microsoft was deemed to violate anti-trust laws: Its dominant position in the OS market was being used to push out third parties in the browser market.

If Google is artificially raising its own non-search products in search results that otherwise wouldn't place those products as prominently, that might well be an anti-trust violation.

Well in MS' case I was under the impression is was specific business practices that were at issue. Like particular contracts with vendors and the buying out of competition.

As for Google, technically speaking, everything is artificial. The point is you don't want the raw results because they aren't particularly useful much of the time. The point of any search engine is to filter results in such a way as to get something relevant. So really how are we supposed to tell if something is artificially elevated when everything already is?

Exactly, IIRC in the MS vs US case, there was evidence showing that MS had gone to IBM/Sun, who were working on a desktop OS at the time, and basically said "stop now, or we revoke ALL of your OEM windows licenses and completely kill your hardware business." And, this was just one aspect of that trial.

Exactly, IIRC in the MS vs US case, there was evidence showing that MS had gone to IBM/Sun, who were working on a desktop OS at the time, and basically said "stop now, or we revoke ALL of your OEM windows licenses and completely kill your hardware business." And, this was just one aspect of that trial.

Hmm. While I'd hate to hijack this thread into a rehash of DoJ v MS, I would love to have a link to that evidence. I don't recall that at all.

Exactly, IIRC in the MS vs US case, there was evidence showing that MS had gone to IBM/Sun, who were working on a desktop OS at the time, and basically said "stop now, or we revoke ALL of your OEM windows licenses and completely kill your hardware business." And, this was just one aspect of that trial.

Hmm. While I'd hate to hijack this thread into a rehash of DoJ v MS, I would love to have a link to that evidence. I don't recall that at all.

Not to derail this thread, but in the name of citing source for relevant discussion here:

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- Most notably �[Netscape] also learned that Microsoft had threatened to terminate Compaq�s Windows license. This would have put Compaq �the largest PC OEM in the world �out of business. This demonstrates Microsoft�s unprecedented power�(D89) �Barksdale claims this leads to Compaq�s decision not to put Navigator on the desktop

Exactly, IIRC in the MS vs US case, there was evidence showing that MS had gone to IBM/Sun, who were working on a desktop OS at the time, and basically said "stop now, or we revoke ALL of your OEM windows licenses and completely kill your hardware business." And, this was just one aspect of that trial.

Hmm. While I'd hate to hijack this thread into a rehash of DoJ v MS, I would love to have a link to that evidence. I don't recall that at all.

Not to derail this thread, but in the name of citing source for relevant discussion here:

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- Most notably �[Netscape] also learned that Microsoft had threatened to terminate Compaq�s Windows license. This would have put Compaq �the largest PC OEM in the world �out of business. This demonstrates Microsoft�s unprecedented power�(D89) �Barksdale claims this leads to Compaq�s decision not to put Navigator on the desktop

While not IBM/Sun, this shows the same predatory actions that Microsoft was clearly carrying out against competition at the time (and not the only instance of it).

The situation was more complex than that; there were preexisting agreements between MS and Compaq, which MS felt that Compaq had breached. See the Findings of Fact, paragraphs 205-207. And I do not see the threat against IBM as claimed by Kin24. Instead, Microsoft had offered IBM a deal where it would cut the price of Windows by about $8 per copy if IBM would advertise their computers with Windows only, and abandon advertising OS/2 with their computers. IBM declined. MS did not threaten to stop selling Windows to IBM (paragraphs 117-118 of the same Findings of Fact).

I'm not arguing that MS were fully in the right here. They absolutely were, in my opinion, throwing around the weight of their considerable market dominance. Too much so, I think.

So Google takes advantage of the market share of its search engine to promote its products within its own search engine, and that's viewed as an anti-competitive activity. Apple, on the other hand, is apparently free to abuse the Justice System to exclude its competitors from the market by suing them over the use of rounded-edged rectangles? How is THAT fair?

One act is missing from the conversation. Anti trust law is designed to protect customers. It is not meant to protect competitors. So those of you who think Google is guilty, ask yourselves this: "How is Google harming customers?" The answer is they aren't. They give their services away for free and there are plenty of competing services. This is just the Microsoft coalition using the legal system as a tool.

One act is missing from the conversation. Anti trust law is designed to protect customers. It is not meant to protect competitors. So those of you who think Google is guilty, ask yourselves this: "How is Google harming customers?" The answer is they aren't. They give their services away for free and there are plenty of competing services. This is just the Microsoft coalition using the legal system as a tool.

Maybe someone else will offer to give away the services for free while permitting me greater control of my personal information. Maybe someone would actually pay me for my information rather than giving me cheap web apps for it. Who knows? Tough for anyone to get tractoin against Google though if they are using thier power in search to prevent alternative business models from having any chance in hell.

One act is missing from the conversation. Anti trust law is designed to protect customers. It is not meant to protect competitors. So those of you who think Google is guilty, ask yourselves this: "How is Google harming customers?" The answer is they aren't. They give their services away for free and there are plenty of competing services. This is just the Microsoft coalition using the legal system as a tool.

Maybe someone else will offer to give away the services for free while permitting me greater control of my personal information. Maybe someone would actually pay me for my information rather than giving me cheap web apps for it. Who knows? Tough for anyone to get tractoin against Google though if they are using thier power in search to prevent alternative business models from having any chance in hell.

Yeah, because Google is the only search engine on the planet and armed gunman come and take away anyone else who tries to start one. Google is the biggest because they happen to be the best. But considering nothing stops Bing from competing, I don't think the FTC has a pot to piss in. In fact, Bing's popularity was growing, so Google obviously doesn't have a strangle hold on the market.

If the FTC investigation has turned up evidence that Google has been unfairly rigging its search results (which Google categorically denied at the Senate hearing on this last year), the pot will be huge, and there'll be all kinds of piss to go around.

One act is missing from the conversation. Anti trust law is designed to protect customers. It is not meant to protect competitors. So those of you who think Google is guilty, ask yourselves this: "How is Google harming customers?" The answer is they aren't. They give their services away for free and there are plenty of competing services. This is just the Microsoft coalition using the legal system as a tool.

Maybe someone else will offer to give away the services for free while permitting me greater control of my personal information. Maybe someone would actually pay me for my information rather than giving me cheap web apps for it. Who knows? Tough for anyone to get tractoin against Google though if they are using thier power in search to prevent alternative business models from having any chance in hell.

Yeah, because Google is the only search engine on the planet and armed gunman come and take away anyone else who tries to start one. Google is the biggest because they happen to be the best. But considering nothing stops Bing from competing, I don't think the FTC has a pot to piss in. In fact, Bing's popularity was growing, so Google obviously doesn't have a strangle hold on the market.

1) Go to a VC and request funding for a general search engine to compete with Google. Watch yourself get laughed out of the room, regardless of how 'brilliant' your concept might be.

2) That in and of itself is not illegal. But if Google is maintaining that dominance illegally, or using that dominance to move into new markets, that could indeed be illegal, depending upon how it is being done.

There really are no laws saying a Wallmart employee needs to tell the customer about how that item is cheaper at the other store.

True, but this isn't quite the same thing. In terms of reviews/flight info, price comparison sites, this would be more akin to a Wal-Mart employee going to a Bose store (or Sony outlet, Best Buy or whoever) and cataloging all of their products with their pricing data. Then, they steal several truckloads worth of merchandise, re-brand everything as "Wal-Mart", put the originally branded merchandise in the back of the store and tell Bose, Sony, or whoever they stole their products from to "meet their demands" or else they'll never get back on the store shelves.

Extending the example above, you can use the increased profits received by benefiting from "stolen" merchandise to buy out the suppliers of other competitors/horizontal niche markets (*cough* Google acquisition of ITA Software*cough*). You're also powerful enough to coerce others into signing a deal with that allows them to rebrand/include your products at in a deal that results in lower revenue had you sold it yourself. So you sign the deal because it's better to get "something" then to have your product to in the back of the store where no one ever looks.

I should say that I think Google's search results are great. They used to be my primary go-to search engine. That said, I think they're becoming scavengers and absorbing other online niches as their own. Google flights, user reviews, movies, books, etc. If you recall the scanned books were never going to be for sale or shown in length, that never happened. In the subsequent class-action they got a sweet deal in their settlement that went around existing IP laws. I also find it creepy when I see news shows displaying demographic specific google data during their shows. The example that comes to mind was in 2011(?) when a reporter and a Google rep was at NBC or some station showing trending searches, top G+ posts, and general demographics of the users (voters) for that data. Think things like race, gender, income brackets, etc. That's just what they were showing on their large MS Surface display. You know they have the ability to aggregate that further into things like interests, likely political party (based on searches, interests, etc), and any other metric they want to derive. That's just a little f'ing creepy in my book. With our massive privacy intrusions from the state, who knows when that type of user profiling will become the next data hoard for the NSA, or if you have to meet some threshold from a Google risk assessment to fly on an airplane? Until the U.S. gets more serious with privacy legislation I can't support giving up that kind of data. I stick to more privacy-oriented search engines now and use Google for a backup.